1 Lytton Road, Workington, P.O.

Box 2697, Harare, Zimbabwe

Telephone: (+263) 04 749458, 04 771981 / 5, 04 775324, 04 750339, 04 775330
Fax: (+263) 04 753854, 708573, Email: cottcoholdings@cottco.co.zw

Abridged Group Unaudited Results for the Half Year Ended 30 September 2014

Commentary Group 2013: US$156.1 million). Included in total borrowings Group Unaudited Statements of Financial Position
is a long term loan amounting to US$4.3 million. Capital
expenditure continued to be restricted to essential items as as at 30 September 2014
The economic environment continues to be on the decline as the business continues to focus on debt reduction and the
characterised by declining consumer buying power, tight preservation of cash flow. There were therefore no major items
liquidity from financial institutions and low capacity utilization of capital expenditure purchased during the period. 30-Sept-2014 30-Sept-2013 31-Mar-2014
industry wide. The revision of the economic growth target is US$'000 US$'000 US$'000
testament to the above. Directorate ASSETS
The Board Chairman, Mr F Kembo, resigned from the Board
Operations in October 2014 citing pressure of work and time constraints. Non-current assets
The period under review has witnessed a low national crop of The Board has, in the interim, appointed Dr D Ncube as the Property, plant and equipment 28,322 99,286 29,867
135 000 tonnes, a repeat of the previous season. The stagnation Board Chairman. Investment property - 333 -
in the national crop at low levels is due to poor funding by Other financial assets 5 1,554 5
some merchants owing to the high risk associated with declining Dividend Intangible assets 14 18 15
yields and side marketing that have bedevilled the cotton In light of the company's financial situation, the Directors have
Other receivables 2,847 957 808
industry. Despite these challenges the company recorded a decided not to declare an interim dividend for the half year
31,188 102,148 30,695
growth in intake and market share to 43 500 tonnes and 32% ended 30 September 2014.
respectively up from 34 500 tonnes and 24% last year.
Company Announcement Current assets
The company concluded lint contracts for the just ended The company wishes to inform stakeholders that after an Assets classified as held for sale 6,825 3,125 15,373
season at average prices of US75 c/lb. Producer prices assessment of the company's financial situation, the Board Inventories 40,247 107,603 23,414
averaged US63 c/kg and this scenario has exerted a lot of applied for voluntary judicial management to the High Court Other current assets 12,492 78,693 14,875
pressure on profit margins. of Zimbabwe. Subsequent to this, a suspension of the 59,564 189,421 53,662
application has been agreed to allow for further discussion
Financial Results with lenders. Total assets 90,752 291,569 84,357
Revenue for the period amounted to US$17.8 million
(September 2013: US$20.9 million), a decrease of 15%. The Board also wishes to inform stakeholders that Dr. D Ncube EQUITY AND LIABILITIES
Revenue declined on account of delayed sales off-take and has been appointed Executive Chairman with effect from 8
a reduction in international lint prices. Sales volumes as at December 2014 for a period of three months subject to review. Capital and reserves
September are lower than those for last year; however full Shareholders' funds 21,607 51,558 31,578
year sales volumes are projected to exceed prior year due to Outlook
Non-controlling interest - 32,708 -
higher intake volumes achieved. Global lint production is expected to be in excess of demand
21,607 84,266 31,578
and this may see a continuation of the depressed lint price
Despite the company paying an average producer price of scenario. Despite the odds Zimbabwean cotton continues to
US63c/kg in order to protect its market share, there is 30% Non-current liabilities
attract world customers therefore demand remains high.
reduction in the loss from continuing operations compared to Borrowings 4,367 13,040 5,809
the same period last year. The reduced loss for the period is Deferred tax liabilities - 13,201 331
reflective of the cost containment initiatives adopted by the By order of the Board Finance lease liabilities - 83 -
company. Production overheads, administrative and finance 4,367 26,324 6,140
costs are, on average, 50% lower than last year, which is a
positive testament to the success of the company's business P Manamike Current liabilities
rationalisation and cost cutting initiatives. Borrowings 49,459 73,190 27,984
Company Secretary Liabilities classified as held for sale 584 467 467
Total group borrowings at US$58.3 million are 63% lower Other current liabilities 14,735 107,322 18,188
than same time last year (The Cotton Company of Zimbabwe 64,778 180,979 46,639
(CCZ) 2014: US$58.2 million; CCZ 2013: US$78.5 million;
Total equity and liabilities 90,752 291,569 84,357

Group Unaudited Income Statements

for the Six Months Ended 30 September 2014 Group Unaudited Statement of Cash Flows
for the Six Months Ended 30 September 2014
Restated
30-Sept-2014 30-Sept-2013 31-Mar-2014
30-Sept-2014 30-Sept-2013 31-Mar-2014
US$'000 US$'000 US$'000
US$'000 US$'000 US$'000

Revenue 17,772 20,936 42,001

Cash flow from operating activities
Operating cash flow before reinvesting in working capital (3,904) (14,655) 28,250
Loss from operations (6,241) (6,278) (22,316)
Working capital movements (20,111) 5,923 (10,578)
Net finance costs (4,434) (11,054) (20,693)
Investment income 227 25 67
Net taxation paid (99) (2,793) (8,708)
Other gains 781 602 1,419
Net cash utilised in operations (28,548) (22,579) (11,729)
Finance costs (3,978) (7,426) (13,409)
Gain on disposal of Group entities - - 37,227
Net cash inflow/(outflow) from investing activities 10,821 (1,743) 63,040
Net cash inflow/(outflow) from financing activities 21,703 9,789 (13,517)
(Loss)/profit before taxation (9,211) (13,077) 2,988
Effect of exchange rate fluctuations on cash held - (5,266) -
Increase/(decrease) in cash and cash equivalents 3,976 (19,799) 37,794
Taxation (96) (153) (320)

Group Statement of Changes in Equity

(Loss)/profit after tax from continuing operations (9,307) (13,230) 2,668

(Loss)/profit from discontinued operations (664) (13,838) 12,188

for the Six Months Ended 30 September 2014
(Loss)/profit for the year (9,971) (27,068) 14,856
Attributable to equity holders of the parent Minority Total
Share Capital Retained Total Interest Equity
(Loss)/profit attributable to: Capital Reserves Earnings
Equity holders of the parent (9,971) (20,684) 5,851
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Non-controlling Interest - (6,384) 9,005

Balance at 31 March 2012 5,341 26,515 51,695 83,551 41,243 124,794

(9,971) (27,068) 14,856

Weighted number of shares in issue 1,094,957 534,126 627,598 Changes in equity for 2013
Share based payments transactions - 97 - 97 86 183
Basic (loss)/earnings per share (US cents) (0.91) (3.87) 0.93 Acquisition of interest(s) in foreign
Diluted (loss)/earnings per share (US cents) (0.90) (3.72) 0.92 subsidiary/associate/joint venture - (45) (50) (95) 95 -
Disposal of interest(s) in foreign
subsidiary/associate/joint ventures - (2,454) - (2,454) (822) (3,276)
Group Unaudited Statement of Comprehensive Income Dividend paid and received within the group - - 1,598 1,598 - 1,598
for the Six Months Ended 30 September 2014 Dividend paid - - - - (1,585) (1,585)
Total comprehensive income for the
Restated year (net of tax) - (2,923) (6,466) (9,389) 927 (8,462)
30-Sept-2014 30-Sept-2013 31-Mar-2014 Balance at 31 March 2013 5,341 21,190 46,777 73,308 39,944 113,252
US$'000 US$'000 US$'000
Changes in equity for 2014
(Loss)/profit for the period (9,971) (27,068) 14,856
Share based payments transactions - (1,705) - (1,705) - (1,705)
Issue of shares 5,609 9,530 - 15,139 - 15,139
Other comprehensive income
Impairment of property, plant and equipment net of tax - - (2,493) Disposal of interest(s) in local
Impairment charge against revaluation reserve - (828) - subsidiary/associate/joint venture - - 2,662 2,662 (47,296) (44,634)
Exchange differences on translating foreign operations (net of tax) - (1,380) (2,085) Dividend paid - - (60,751) (60,751) - (60,751)
Income tax on other comprehensive income - (9) - Total comprehensive income for the
year (net of tax) - (2,503) 5,429 2,926 7,352 10,278
Other comprehensive loss for the period - (2,217) (4,578) Balance at 31 March 2014 10,950 26,512 (5,883) 31,579 - 31,579

Total comprehensive (loss)/income for the period (9,971) (29,285) 10,278

Changes in equity for 2015
Total comprehensive income for the
Total comprehesive (loss)/income attributable to:
Equity holders of the parent (9,971) (29,285) 2,926 year (net of tax) - - (9,971) (9,971) - (9,971)
Non-controlling Interest - - 7,352 Balance at 30 September 2014 10,950 26,512 (15,854) 21,608 - 21,608
(9,971) (29,285) 10,278

Directors: D Ncube (Chairman), JP Maposa (Deputy Chairman), C Chihuri (Managing Director), AE Adam, RAM Maunze
 1 Lytton Road, Workington, P.O.Box 2697, Harare, Zimbabwe
Telephone: (+263) 04 749458, 04 771981 / 5, 04 775324, 04 750339, 04 775330
Fax: (+263) 04 753854, 708573, Email: cottcoholdings@cottco.co.zw

Abridged Group Unaudited Results for the Half Year Ended 30 September 2014

Group primary segment report NOTES

BUSINESS SEGMENT
Cotton FMCG Seed Investments Group Discontinued Continuing 1. Presentation
business business business business eliminations Total operations operations The financial statements are presented in United States dollars, which is the Group's functional currency. The financial
Six months to
information presented in United States dollars has been rounded off to the nearest thousand.
30 September 2014

2. Accounting policies
Revenue 17,772 - - - - 17,772 - 17,772
Accounting policies have been applied consistently with those used in the Group financial statements of Cottco Holdings
Limited for the year ended 31 March 2014.
Loss from operations (6,171) - - (70) - (6,241) - (6,241)

Investment income 36 - - 191 - 227 - 227 3. Basis of preparation

Other gains/(losses) 64 - - (1,473) 2,190 781 640 1,421 The basis of preparation of these financial statements is the International Financial Reporting Standards (IFRS).
Finance costs (3,978) - - - - (3,978) - (3,978)
Loss before taxation (10,049) - - (1,352) 2,190 (9,211) 640 (8,571) 4. Statement of compliance
The financial statements have been prepared in conformity with International Financial Reporting Standards.
Other information
Segment assets 90,169 - - 17,924 (17,341) 90,752 (544) 92,208 5. Results of discontinued operations
Segment liabilities (73,295) - - (2,340) 6,490 (69,145) 584 (68,561) In compliance with the requirements of International Financial Reporting Standards 5 (IFRS 5), the assets and liabilities of
Segment net assets 16,874 - - 15,584 (10,851) 21,607 40 21,647 the discontinuing operations amounting to US$0.8million and US$0.6 million have been included in Group Statement of
Financial Position as assets classified as held for sale', and as 'liabilities classified as held for sale' respectively. The discontinued
Capital expenditure 122 - - - - 122 - 122 operations did not operate during the year. The comparative information incorporates the results of Seed Co and Olivine. The
analysis of assets and liabilities of the discontinued operations is shown below.
Depreciation 1,224 - - - - 1,224 - 1,224

Restated
BUSINESS SEGMENT
30-Sept-2014 30-Sept-2013 31-Mar-2014
Cotton FMCG Seed Group Discontinued Continuing
US$'000 US$'000 US$'000
business business business Other Eliminations Total operations operations

Property, plant ad equipment - 1,372 59,605

Six months to
30 September 2013 Current assets 779 15 139,657

Revenue 20,936 - - - - 20,936 - 20,936 Total assets 779 1,387 199,262

(Loss)/profit from operations (9,177) (684) (10,133) (748) 3,647 (17,095) 10,817 (6,278) Deferred tax 439 439 9,152
Current liabilities 146 28 65,633
Investment income 24 6 62 259 (258) 93 (68) 25
Other gains/(losses) 602 3 169 - - 774 (172) 602 Total liabilities 585 467 74,785
Finance costs (7,684) (637) (3,881) - 258 (11,944) 4,518 (7,426)
(Loss)/profit before taxation (16,235) (1,312) (13,783) (489) 3,647 (28,172) 15,095 (13,077) Net assets 194 920 124,477

Other information
Segment assets 105,662 24,432 166,529 106,498 (111,552) 291,569 (190,961) 100,608 Revenue - - -
Segment liabilities (100,392) (16,305) (96,982) (6,861) 13,236 (207,304) 113,287 (94,017)
Segment net assets 5,270 8,127 69,547 99,637 (98,316) 84,265 (77,674) 6,591
Loss from operations - - (20)

Capital expenditure 163 36 3,982 - 3,982 8,163 (4,018) 4,145

Loss for the year - - (16)
Depreciation 1,626 562 1,620 32 - 3,840 (2,182) 1,658
7. Supplementary information

7.1 Profit from operations is stated after the following impairment losses
BUSINESS SEGMENT
Cotton FMCG Seed Group Discontinued Contiuing Impairment Losses by Operating Segment
business business business Other Eliminations Total operations operations Operating segment Cotton Seed FMCG Other Total
31 March 2014 30-Sept-2014 30-Sept-2014 30-Sept-2014 30-Sept-201430-Sept-2014
US$'000 US$'000 US$'000 US$'000 US$'000
Revenue 42,001 21,129 109,506 - - 172,636 (130,635) 42,001
Trade and other debtors 64 - - - 64
(Loss)/profit from operations (19,497) 60 24,431 (4,104) 1,284 2,174 (24,491) (22,317) Total 64 - - - 64

Investment income 43 4 114 516 (492) 185 (119) 66 Charged to profit and loss 64 - - - 64
Other gains/(losses) 1,368 9 712 (28,324) 28,331 2,096 (676) 1,420
Finance costs (13,900) (1,084) (6,673) - 492 (21,165) 7,757 (13,408)
Profit on disposal of
30-Sept-2014 30-Sept-2013 31-Mar-2014
Group entities - - - - 37,227 37,227 - 37,227
US$'000 US$'000 US$'000
Income tax credit/(expense) 3,458 197 (5,538) (3,447) (331) (5,661) 5,341 (320)
(Loss)/profit before taxation (28,528) (814) 13,046 (35,359) 66,511 14,856 (12,188) 2,668
7.2 Depreciation 1,227 3,838 8,376
Other information
Segment assets 76,022 - - 28,031 (19,696) 84,357 (1,301) 83,056 7.3 Capital expenditure 137 4,181 11,933
Segment liabilities (55,251) - - (7,223) 9,695 (52,779) 467 (52,312)
Segment net assets 20,771 - - 20,808 (10,001) 31,578 (834) 30,744 7.4 Commitments for capital
expenditure
Capital expenditure 676 - - - - 676 - 676 Contracted for - 368 103
Approved by the Directors but
Depreciation 3,215 - - 56 - 3,271 - 3,271 not yet contracted for - 12,453 3,319
TOTAL - 12,821 3,422

8. Audit of the financial statements

The interim financial statements have not been audited.

Directors: D Ncube (Chairman), JP Maposa (Deputy Chairman), C Chihuri (Managing Director), AE Adam, RAM Maunze